January 2007

HHS Rejects Solution to Reduce U.S. Healthcare Costs
By Melinna Giannini

Follow-up article to "The Healthcare Codes Monopoly" by Dr. Carolyn Dean that appeared in the June/July edition.

The Secretary of the U.S. Department of Health and Human Services (HHS) rejected use of ABC codes for filing electronic claims for non-medical treatments after October 16, 2006.

This action overturned former HHS Secretary Tommy Thompson’s approval to test the cost benefits of using ABC codes in electronic claim transactions for care provided by nurses, alternative medicine, behavioral health, nutrition and other practitioners who aren’t conventional physicians. Over 11,000 providers, Medicaid agencies, insurers, PPO networks and technology vendors signed up as potential beta sites to test ABC codes in 2003. ABC Coding Solutions (www.ABCcodes.com), the developers of ABC codes, chose a Medicaid plan in Alaska and a Medicare plan in New Mexico to collect data because these organizations were able to provide data from practitioners and payors. The company reported empirical cost data from these sites to HHS in October of 2004. The company also provided financial projections showing how use of ABC codes could save over $51 billion per year.

In May of 2005, HHS-appointed reviewers cited lack of empirical data and lack of industry support as two key reasons the new Secretary should not adopt ABC codes. However, HHS reviewers misstated and/or left out key facts in their executive summary to the HHS Secretary including the following:

• Empirical data was submitted documenting over 500,000 successful electronic claim and payment transactions conducted using ABC codes in one year. The savings from using ABC codes was over $2 million;
• Adoption of ABC codes is supported by Alaska Medicaid, the American Nurses Association (with more than 2.7 million members), American Healthcare Alliance (a nation-wide PPO), Midwives of North America, the National Association of Clinical Nurse Specialists, many other practitioner groups, other payors and members of Congress;
• The review indicated ABC codes were limited to alternative medicine when the codes actually describe care provided by over three million healthcare practitioners; and
• The HHS review stated that ABC codes duplicated existing mandatory code sets. No list of codes was provided by HHS showing which codes it was referring to (although this list was asked for several times) and Alaska Medicaid provided evidence that the codes it used were not in mandatory code sets.

ABC Coding Solutions asked HHS to correct its review in July of 2005. No corrections were made. Instead, HHS asked for additional empirical data while granting less than a year to collect additional data. In 2006, the company asked HHS for an impartial review. It also asked for a five-year extension to collect additional empirical data. Both requests were denied. The company is now asking for an investigation outside of HHS and will solicit support from Congress after the November 7, 2006 election.

Consequences of critical gaps in coding

Medical errors may be the third leading cause of death in the United States according to an article published in the Journal of the American Medical Association (JAMA) written by Dr. Barbara Starfield, MD, MPH, of the Johns Hopkins School of Hygiene and Public Health¹. In 2003, U.S. spending per capita for healthcare had reached $5,635, two-and-a-half times the average per capita spending in other developed countries². However, the United States ranks 40th in overall population health³. How are these medical statistics related to codes?

Our government uses the term "healthcare" to mean "conventional medicine." The codes the government mandates focus on medicine. Codes are essential for negotiating fees with practitioners, filing insurance claims, paying for care, monitoring outcomes and underwriting coverage. The Healthcare Common Procedure Coding System (HCPCS)⁴ is developed jointly by HHS and the American Medical Association (AMA). HHS mandates that the entire healthcare industry use HCPCS codes for processing Medicare claims. HHS also mandates HCPCS codes be used by the entire industry for filing electronic claims. Thus, the HHS rejection of ABC codes, if not overturned, makes it unlikely that any other healthcare entity will use ABC codes for processing manual claims – even though manual use is not prohibited.

HHS’ coding policy was characterized by Senator Trent Lott⁵in 2001 when he expressed his concerns about the HHS agreement "...to exclusively use and promote the AMA’s copyrighted CPT⁶ code for the purposes of reimbursing Medicare and Medicaid bills from doctors for outpatient services. As a result of HCFA’s⁷ and the federal government’s endorsement of the AMA’s copyrighted outpatient code -- to the exclusion of all competitors -- private insurance companies and others were also forced to adopt the CPT as their billing standard as well."

The "statutory monopoly" Lott refers to in his letter also points to financial incentives granted by the AMA to HHS. These incentives may explain why HHS ignored documented cost-savings and industry support for ABC codes in its review. HHS has a contractual, financial, historical and procedural conflict of interest in endorsing any other code set. Without adopting codes to support claims from practitioners who are not members of the AMA and/or not conventional physicians, our national healthcare crisis will continue.

How codes affect your access to care

Traditional insurance plans will pay thousands of dollars for back surgery but frequently limit payments for chiropractic care. Insurers don’t make this decision because chiropractic care doesn’t work, they make this decision because there aren’t sufficient codes (or data resulting from codes) to determine what the chiropractor did to treat the patient, if the care provided was legal in the state where care was provided, and/or if the care was cost-effective. Codes are essential for making these determinations. Without adequate codes, insurance companies have no way of knowing if a plan of treatment works or doesn’t work. To avoid the unknown, insurers either limit the number of annual visits or the dollars it will pay for chiropractic care, even when some chiropractic treatments are less expensive, less invasive and more effective than medical care.

Acupuncturists, homeopaths, massage therapists, naturopaths, nutritionists, midwives and others are frequently locked out of reimbursement completely. MDs practicing alternative medicine also lack codes and are frequently attacked by state medical boards for fraudulent billing. Advanced practice nurses, who are authorized in every state to treat patients without physician oversight, frequently work under physicians due to the complications involved in getting paid. Behavioral health practitioners, optometrists, and podiatrists experience coverage limitations and claim denials at a higher rate than medical doctors due to insufficient codes. Patients frequently pay for insurance premiums AND from their own pockets if they don’t limit their choice to medical care.

What can you do to demand greater access to qualified caregivers?

Contact your state senators and congressmen and tell them that you oppose the HHS rejection of ABC codes because they fill critical gaps in medical coding. Your efforts can reform healthcare and reduce U.S. healthcare costs while giving you greater access to and choice of qualified caregivers. Your elected officials need to know your position on this important issue.

We should not have to pay more and get less for our healthcare dollars in the U.S. Representative Dan Burton said it well, "...I believe that ABC codes, and other similar code sets, have significant potential to revolutionize the American health care system. I am also confident that an independent review of these codes will bear this out."⁸

To learn more about lobbying Congress, please send an email to; PublicRelations@ABCcodes.com.

To learn how all practitioners can file both electronic and paper claims using HCPCS codes while truthfully documenting care using ABC codes, please visit www.eClaim.biz.

For general information about ABC codes:
ABC Coding Solutions
6121 Indian School Rd. NE
Suite 131
www.ABCcodes.com
1-877-621-5465

---

1. JAMA Volume 284, No. 4, July 26th 2000.
2. http://www.cmwf.org/Publications/Publications_show.htm?doc_id=372221
3. The Economist Newspaper Ltd., Pocket World in Figures, 2006 Edition, published by Profile Books, Ltd., London.
4. HCPCS Level I codes are the CPT® codes, developed by the AMA. HCPCS Level II codes supplement the CPT ® codes and are developed by HHS.
5. http://www.aapsonline.org/medicare/lottcptletter.htm
6. Current Procedural Terminology (CPT) ® is a registered trademark of the American Medical Association.
7. Health Care Finance Administration (HCFA), the former name of the Centers for Medicare and Medicaid Services (CMS).
8. Letter dated September 25, 2006 from Congressman Dan Burton to HHS Secretary Michael O. Leavitt.